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Frontera Energy Corp T.FEC

Alternate Symbol(s):  FECCF

Frontera Energy Corporation is a Canada-based oil and gas company. The Company is involved in the exploration, development, production, transportation, storage, and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The Company has a diversified portfolio of assets with interests in 27 exploration and production blocks in Colombia, Ecuador, and Guyana, and pipeline and port facilities in Colombia. The Company’s segments include Colombia, Ecuador, Guyana, Midstream Colombia, and Canada & Others. Colombia includes all upstream business activities of exploration and production in Colombia. Ecuador includes all upstream business activities of exploration and production in Ecuador. Guyana includes exploration and infrastructure. Midstream Colombia includes the Company’s investments in pipelines, storage, port, and other facilities relating to the distribution and exportation of crude oil products in Colombia.


TSX:FEC - Post by User

Comment by kcac1on Oct 20, 2024 1:45pm
128 Views
Post# 36273782

RE:Puerto Bahia

RE:Puerto BahiaThe port's value is in the port itself, not the current revenue it generates. Especially with it being a wholly owned subsidary controlled by de Alba who somehow has become very wealthy mismanging companies, it is likely generating no where near its income potential due to it being a de Alba controlled business.  It is a very modern deep water port very soon to have a two way pipeline to a refinery. Work on the port started on it in 2014, and it is still in the process of growing.  Besides the 2 way pipe to the refinery, they have started work of making it the lagest LPG port in the region. Besides the refinery.  It has easy access to rail, the Carribean Sea, Panama canal and the Magdalena River which is heavily used for barge transportation including crude oil..

It is very costly and time consuming to build a modern port and I am sure all sorts of permits are involved which are avoided by buying a modern existing port.

Compare Bahia to the Chancey port being build in Peru. It was started in 2019 with an intitial estimate of $3Bil to build. It is not yet completed. Cost overruns already have added $600Mil to the cost of building the port. It is a JV between one of the world's largest shipping companies, Cosco (60%) owned by China and Volcan (40%) a large mining company based in Peru.  Chancey is being built primarily for container ships, with no means yet to handle petroleum products. It is shallower than Bahia and further from the Panama canal. It is also on the opposite side of South America.

Surely there is a large market for an already completed deep water port on the upper east side of South America. Thus not having to worry about time to build, permitting, cost overuns and it already being able to handle both the worlds largest container ships and oil tankers IMMEDIATELY.. 

I think it is more than coincidental that Macquarie (who invests in seaports) provided a line of credit tied to pay off all of Bahis's debt with a line of credit that is backed by FEC's 35% interest in the ODL pipeline which did make significant revenues for FEC in 2023. With $62.8mm in dividends payable this year.

Who owns the other 65% of the ODL pipeline? Ecopetrol, the state owned oil company. With the two way pipeline and soon to be LPG terminal, wouldn't Ecopetrol be a candidate to buy out FEC's  interest in the ODL pipeline and at the same time possibly be interested in being involved in a JV for Bahia? Ecopetrol is worth something like $18Bil and surely have the funds for both. 

Who else might be a prospect for Bahia? How about already mentioned Macquarie, they have an infrasture division that invests in sea ports including terminals in both in the port of Los Angeles as well as the port of Ny/NJ and several other ports throughout the world including JV'ing with the Chinese.  Who else might be interested?. The two largest shipping companies Cosco and Maresk often invest in seaports. Also DP World, a large terminal operator that has interest in terminals in 6 continents.

So, surely there is significant interest in Puerto Bahia. Goldman surely has approached all of the above and far more with their connections and know how.  But I would think the Chinese would be the most interested in this port, either through Cosco...

Or better yet CNOOC just buying FEC outright. They are far more likely to get Guyana to extend CGX's Corentyne license. They already have a small oil operation in Colombia and China has recently invested Billions into Colombian Infrastructure. They would have a turnkey port to ship their Guyana crude to a close by refinery and maybe even JV with Ecopetrol on the port to make it easier for Colombia to approve the deal. It should be easy to make Cosco, the operator of the port likely bringing in far more revenue than current.

Just my and MS copilot's .02

 
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